You Have ‘Stopped to Think’ about the Real Estate Market……
When are you going to Start Again........with a Mixed Use Project?

As an informed buyer, seller, investor, or developer you have stepped back and assessed the current real estate conditions in the marketplace…..just thinking. Despite a sluggish economy and recent decline in a runaway housing market, consumers are being more cautious about spending. Somehow we still see sustainable growth rates. Spending on home furnishings, specialty and luxury items, and sporting goods have dropped, while discount retailers and home improvement centers remain steady. According to national reports, mixed-use and lifestyle centers outpace the traditional community and regional centers, with restaurants and fast foods showing continued growth.
Still thinking about it?

In Your Backyard…..
Looking at the Treasure Valley Marketplace – Boise, Nampa, Meridian, Eagle, Caldwell, and Kuna – we have a mixed (bag) to view. Currently, we have substantial residential/lot inventory, even a drop in pricing, a higher vacancy in retail strip centers (new and second generation) with more centers coming. In the urban core we have condominiums in the completion stages or being planned, in the outlying areas we have new large scale communities in the works, and the ‘Smart Growth’ groups all working toward the needed balance between infrastructure and expansion.
Still thinking about it?

As consumer needs evolve and demographic changes occur, retail development has shifted from traditional retail centers to mixed use and lifestyle centers, thus following the re-adjustment in spending due to higher prices for energy and the cost of goods.
When a section or area of a city looses its economic usefulness, perhaps crime ridden, it becomes slated for a change. It can be a former water front district, a marginal housing complex, a warehouse district, or even a shopping mall. The direction of choice is a ‘mixed use’ center. This new architecture now becomes a live, work area environment, in turn binds and revitalizes the community with new life. This urban (mixed use) life has housing, office, retail/entertainment, and park areas. This is not necessarily a new concept, it is traditionally found in European cities which did not have the real estate, i.e., the open prairies or farm land in which to expand.
Still thinking about it?

A Successful Mixed Use Development…..
Finding the right site is a combination of ‘location, multi-use, tenant mix, and financing’ where the benefits outweigh the drawbacks. Projects of this type are often met with objections, but become most appealing when located in in-fill areas, which in turn, combat the opposition in creating projects that the size and range fit the population and density need. Housing will have town homes, apartments, and two-story lofts, all to be affordably priced to attract students and their parents or empty nesters. Along with housing let us bring in day care and fitness, a museum perhaps, a multi-national food court, bakeries and coffee shop, and a fix-it hardware store. To attract driving retail traffic it should offer basic, attractive goods and services such as an upscale grocer, health care, specialty stores and restaurants, a pedestrian plaza/play park, and small business and professional offices. There may be an entertain venue/component or cultural center which can be beneficial, which helps to keep people in the area longer. The main benefit of a mixed-use development is the right mix of live, work, and play, where people can just be, and still be central for destination trips.

Financing Considerations….
Finding the right developer or sponsor is challenging, as many specialize in retail, commercial, or housing. Banks even structure their funding in property types. Comfort is found in doing what you know best, however, repetition lacks creativity and sustainability, and a missed opportunity to development an ‘environmental friendly’ project, a people place - multifamily, multi-service, work, retail, and play. An experienced developer can recruit a seasoned team for housing, office, retail, and/or special interest, which then attracts the best equity and financing resources. Private money, developers acting outside of the box, usually gain support from financial institutions once this vision is obvious where everyone in the community benefits.
Still thinking about it?

A Place for Us……
A few of our communities have this vision or acknowledge the need for change, established a focus, that of bringing a mixed use project to the fore. These are Meridian, Nampa, Eagle, Boise’s downtown core, and yes Garden City. Each of these communities has initiated plans working toward this goal. Of these, Garden City has acted on this concept and is currently midway through the Waterfront District – a planned mixed-use development.
According to Garden City’s comprehensive plan there other focal points in which a more comprehensive project would be able to create a true live, work, and create community.
Central to everywhere, “….nd Street and ……Street,” is the hub in which the energy can flow. Alright, you have thought much too hard and long, now is the time to make your move. There are parcels available now, parcels with improvements ripe for change, traffic corridors that need new life, amenities waiting for use, all central to the metro market. If you watch and wait to see how “it goes,” you are still thinking about it.

Jan Ozimkiewicz is a commercial agent with SelEquity Real Estate. Applying his early training as an architect, he worked in the cities of Chicago, New York, and Phoenix, for fortune 100 corporations. Being in their corporate real estate department, a focus was in acquisition, disposition, site selection, facility planning, and property management.